Claiming repairs and maintenance for your rental property

Claiming repairs and maintenance for your rental property



Need to do some repairs on your property? Well you may be able to deduct these repairs
and maintenance costs. But they must relate directly to wear and
tear or other damage that occurred as a result of you renting out the property. 'Repairs' generally involve a replacement
or renewal of a worn out or broken part, for example replacing some guttering damaged in
a storm, or replacing part of a fence that was damaged by a falling tree branch. 'Maintenance' is preventing or fixing deterioration. And that can include painting the house, oiling
a deck, or maintaining plumbing. But as Sara found out, some expenses are not
immediately deductible. When we bought our property, we had a builder
repaint these walls, replace some broken light fittings and fix the bedroom doors. We also found termites in some of the floorboards
and they had to be replaced. As we had to spend that money on initial repairs
to make the property suitable for renting we couldn't claim it back straight away. But we'll be able to use these costs to work
out our profit when we sell the property. And then you had some repairs done which you
did claim? Yes. After our last tenants moved out we discovered
that the stove didn't work, kitchen tiles were cracked and the toilet window was broken. So this time you could claim a deduction for
the repairs because they related to when your tenants were living in the property. You also mentioned there was a bad storm which
damaged your fence? There certainly was. We could have repaired the fence, but it was
old so we thought it best to replace it. As it was a new fence and not a repair we
couldn't claim an immediate deduction. Other expenses where you can't claim an immediate
deduction include a new kitchen or bathroom, or renovations to the property. These are building costs, which you can normally
claim at 2.5% each year for 40 years from the date construction was completed. And if your rental property is a strata unit,
then the repairs and maintenance costs will generally be paid out of a common fund. Special levies and special purpose funds for
building work are not immediately deductible, but are generally eligible for the 2.5% yearly
deduction. If you'd like to find out more and to watch
other videos in the series go to ato.gov.au/rental.

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